One of the biggest barriers to a robust recovery in the housing market is a lack of supply. There are simply not enough homes listed for sale to meet the demand—and part of that is because a growing number of home buyers are not selling their previous homes.
"As people are starting to move, they're also turning into landlords by choice. And that is definitely having a dent in the inventory numbers," said Nela Richardson, chief economist at Redfin, a real estate brokerage. "Our agents are seeing people come through their door with the cash in hand to buy that next place. A lot of them obviously don't need that equity in their former home, or they're able to tap some of it out and then use it to buy the next place."
It's a strange new irony in housing. Lack of supply is driving prices higher, which is pricing some demand out and driving up rental demand.
For others, however, the rise in home prices is providing useful equity to buy another home while still holding on to their old home, which is then providing lucrative rental income.
"It was surprisingly easy," said Shelly Burley, who considers herself something of an accidental landlord.
She and her husband Keon Burley are now busy decorating their new home in suburban Baltimore. It is four times the size of the downtown row house in which they used to live, but which they now rent out.